Hi All, Noob out of state investor and this is my first investment property. I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.
Property management tried to register the property with the city to start the eviction process. Shocker: When they attempted to register, the city responded back saying this property is condemned.
It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.
PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.
Looking for help here.
Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?
Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?
Question 3) What should my priority be in terms of next steps here?
Hi All, Noob out of state investor and this is my first investment property. I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.
Property management tried to register the property with the city to start the eviction process. Shocker: When they attempted to register, the city responded back saying this property is condemned.
It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.
PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.
Looking for help here.
Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?
Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?
Question 3) What should my priority be in terms of next steps here?
This is why you never purchase a property without a team in place. However, this is a simple fix. Just call the city, explain to them what happen. All the city cares about it making money, They will want permits pulled. They will come to inspect. If all repairs are done correctly no worries. If not rectify it
I am closing on a condemned property next week, all they care about is permits and doing it right
BTW I know most if not all " players " in the Cleveland markets, who did you buy from? Also which title company, I know them all
@Veena Vaidyanathan How did you get into this situation? Did you have a Real Estate agent represent you? Did the lender not discover this prior to close?
Sue the seller and maybe go after your agents brokerage insurance. But if it said AS IS going to be hard to get anything. During attorney review didn't your attorney send a letter stating something along "No violations with city" how did seller respond? If they denied it you definitely have good chance of winning a lawsuit against seller.
This should have been caught at the title company doing the closing. They are supposed to do all checks and check with city too for anything and this should have popped up. I would think your title policy should cover this ? But maybe you can even go after the title company who did the closing and the insurance they hold.
Hi All, Noob out of state investor and this is my first investment property. I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.
Property management tried to register the property with the city to start the eviction process. Shocker: When they attempted to register, the city responded back saying this property is condemned.
It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.
PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.
Looking for help here.
Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?
Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?
Question 3) What should my priority be in terms of next steps here?
This is why you never purchase a property without a team in place. However, this is a simple fix. Just call the city, explain to them what happen. All the city cares about it making money, They will want permits pulled. They will come to inspect. If all repairs are done correctly no worries. If not rectify it
I am closing on a condemned property next week, all they care about is permits and doing it right
BTW I know most if not all " players " in the Cleveland markets, who did you buy from? Also which title company, I know them all
Sue the seller and maybe go after your agents brokerage insurance. But if it said AS IS going to be hard to get anything. During attorney review didn't your attorney send a letter stating something along "No violations with city" how did seller respond? If they denied it you definitely have good chance of winning a lawsuit against seller.
Waste of time suing, will collect nothing, Also in Cleveland there are no attorneys involved, something with this sounds fishy. Once this person responds to my post, I can then figure it all out. I have extensive experience there
@Veena Vaidyanathan How did you get into this situation? Did you have a Real Estate agent represent you? Did the lender not discover this prior to close?
It was probably a cash deal ,, most are in Cleveland
@Veena Vaidyanathan this is not right and it will get worse before it gets better. The seller, your agent, and the title company. Some or all may be at fault. Sooner or later you will wish you had gotten an attorney involved. You should get real legal advice ASAP.
@Veena Vaidyanathan How did you get into this situation? Did you have a Real Estate agent represent you? Did the lender not discover this prior to close?
It was probably a cash deal ,, most are in Cleveland
Sue the seller and maybe go after your agents brokerage insurance. But if it said AS IS going to be hard to get anything. During attorney review didn't your attorney send a letter stating something along "No violations with city" how did seller respond? If they denied it you definitely have good chance of winning a lawsuit against seller.
Waste of time suing, will collect nothing, Also in Cleveland there are no attorneys involved, something with this sounds fishy. Once this person responds to my post, I can then figure it all out. I have extensive experience there
Thanks Bob.
Please accept my connection request and I'll give you all details. I appreciate your willingness to help.
@Bob S. I agree with you if we were talking about a tenant but suing a seller who just received liquid funds from sale or a brokerages insurance is something you most definitely can collect on if defrauded.
@Veena Vaidyanathan How did you get into this situation? Did you have a Real Estate agent represent you? Did the lender not discover this prior to close?
It was probably a cash deal ,, most are in Cleveland
@Veena Vaidyanathan as others have mentioned, this sounds like the title company screwed up--and they might be liable to you, and to your lender (the lender presumably lends under the contingency that the property title is clear and the property is not condemned--and it's typically the title company's responsibility to confirm those things).
At this point, it's probably advisable to get an attorney, and have your attorney contact the title company for you (or at least advise you on how you should contact the title company).
Given that you presumably have zero experience negotiating with a title company, you'll probably want an attorney to help you on that. Moreover, contacting the title company yourself with no experience, and no real knowledge of what you're trying to accomplish, could backfire--all the more reason to get the guidance of a lawyer. Specifically, you'll want a lawyer with real estate law and real estate title experience.
@Veena Vaidyanathan as others have mentioned, this sounds like the title company screwed up--and they might be liable to you, and to your lender (the lender presumably lends under the contingency that the property title is clear and the property is not condemned--and it's typically the title company's responsibility to confirm those things).
At this point, it's probably advisable to get an attorney, and have your attorney contact the title company for you (or at least advise you on how you should contact the title company).
Given that you presumably have zero experience negotiating with a title company, you'll probably want an attorney to help you on that. Moreover, contacting the title company yourself with no experience, and no real knowledge of what you're trying to accomplish, could backfire--all the more reason to get the guidance of a lawyer. Specifically, you'll want a lawyer with real estate law and real estate title experience.
Good luck out there!
Thanks. Any recommendations on how to look for a good real estate lawyer?
Hi All, Noob out of state investor and this is my first investment property. I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.
Property management tried to register the property with the city to start the eviction process. Shocker: When they attempted to register, the city responded back saying this property is condemned.
It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.
PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.
Looking for help here.
Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?
Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?
Question 3) What should my priority be in terms of next steps here?
Based on everything that's been said in this thread, it seems more likely to me that you bought a property that has not been lead certified, rather than one that is condemned.
Reason I've come to this conclusion is you bought it with financing. I've never seen a lender do a deal where they let the buyer do a quit claim deed. So I'd imagine you got yourself a general warranty deed and a title insurance policy. First thing a title insurance company is going to do on a deal is run a title report and notify all parties of any clouds on title like the property being condemned. Everyone would then need to sign a disclosure of this and I highly doubt the lender would be willing to fund the deal when this disclosure came out.
A property that isn't lead certified though, it does not create a cloud on title. It's really 100% on the buyer to know if it is lead certified or if it needs to be etc...The Cleveland lead certification law is new to, so most Agents and sellers aren't even aware it exists.
This is a tough one to answer without knowing more information. Buyers are typically in charge of their own due diligence, so this may just go back on you, especially if it was purchased as-is. Seems as though everyone is blaming the title company but if the renovation was complete without approvals, then the city may not have know in order to tell the title company depending on when the property was condemned. I don't know if the title company could have known. I suggest calling your real estate agent, the title company, your inspector, etc... basically everyone involved and see if they can help you resolve. In the long run I would evict the tenants, and work with the city to clear this up as quickly as possible.
Having a property condemed sounds terrible but I have seen a brand new home get condemed because the buyer moved in before a frost free hose bib was installed to get the final inspection. There may be a few easy steps you can do to get this lifted from the property.
The best way to avoid this situation is to go to the planning department to see if there are any red tags, check the permit history and verify that the product(type of home and square footage) being marketed is what the city recognizes. Check with the assessors office too. Do your own due diligence. Realtors have a conflict of interest. They are supposed to represent your financial interest(and some do) but if they rock the boat too much the deal will falter and no commission.
Several years ago I was in contract on a multi family- home and detached manufactured home. I went to the planning department to examine the permits and noticed that when the permit for the home was pulled, it specifically said the manufactured home was to be removed upon completion of the home as it was zoned single family. So I got in line at the zoning desk, mentioned I was in contract for this listing but needed help interpreting what was being marketed. The agent looks at the listing, then the permit, turns red in the face and says this is going straight to code enforcement.
Of coarse, I grab the phone and call my agent. "Larry, we got a little issue here."